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July 02, 2020 | FBN Insights | Kevin McNew

Grains Pause, Watching Weather Going Into Long Holiday Weekend

Corn usage was still almost 35% below 460M bushels seen in same month last year

USDA Grain Crush Higher for May 

  • USDA Grain Crush for May reported corn use for fuel ethanol at 300 million bushels continuing to rebound from 245 million in April.
  • Corn usage was still almost 35% below the 460 million bushels seen in the same month last year. 
  • Sorghum used for fuel ethanol was 3.7 million bushels compared with 4.9 million last month and 9.3 million a year ago. 
  • The implied ethanol yield for May was 2.99 gallons per bushels vs 2.91 gallons last year. 
  • The average yield for this marketing year (Sep-May) is steady at 2.91 gallons per bushel, and higher than 2.88 average over the same period last season.

FBN’s Take On What It Means: The ethanol industry is climbing out of the rut following the slowdown caused by the Covid-19 outbreak. Unfortunately, the demand lost is being reflected in larger corn stocks which may limit potential gains.

NASS Fats and Oils Report Shows Record Crush

  • May industry crush was at a new monthly record of 179.6 million bushels, compared with 165.4 million last year.
  • The cumulative crop year crush now totals 1,628 million bushels, up from 1,577 last year.
  • In the remaining three months of the crop year, crush needs to average 170.6 million bushels each month to meet the USDA forecast.
  • Industry-wide meal production was 4.2 million tons, which was 331,000 more than a year ago.
  • Meal stocks were up 112,000 tons to 498,000 in May.

FBN’s Take On What It Means: Processors had little competition from the export market, helping to keep crush rates high. There was improvement in demand as the US started to reopen after the coronavirus shutdowns, but not enough to keep meal stocks from building, which could be an issue going forward. 

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